Ukraine becomes 'China of eastern Europe' after market falls
Ukraine's equity market has become one of the world's three worst performing exchanges, following a year-to-date decline in shares of over 50%, leading analysts to dub it the "China of eastern Europe".
Ukrainian’s leading PFTS index yesterday suffered a continued decline of 4.8%, following continuing tensions in the region.
This has taken the market's total year to date decline to over 50%, leading to the comparison with China’s CSI 300 index where comparable losses have been recorded so far this year.
Some of the worst hit stocks have been in the steel industry with Avdeevka Coke and Enakievo Steel falling yesterday 7% and 10.4% over fears they will require increasing government support.
The decline comes as Russian equity valuations have also been hit hard in recent weeks by billions of dollars leaving the country in response to the conflict with neighbouring Georgia, with Russia's leading MICEX index losing 19% of its value in the last month.
However, the sharp selloff in Ukrainian equities has led to predictions of an imminent rebound in valuations, with Alfa Bank forecasting a rally within the next two months.
In a report this morning calling Ukraine the “China of eastern Europe”, Alfa Bank analyst Denis Shauruk said the fall in valuations offered investors a good opportunity to pick up Ukrainian stocks on the cheap.
He wrote: “For many, this may look like a disaster, but for those who view underperforming stocks and indexes as the perfect buying opportunity, this is a clear signal to buy.”
-- Write to Harry Wilson at hwilson@efinancialnews.com
del.icio.us
Digg
Newsvine
reddit
StumbleUpon
